Cost Pricing

Costing & Pricing Decisions

Executive Summary

Overview

Costing and price decisions are important to the growing corporation. Each of these separate but coinciding factors is important in gaining profitable margins when the product has been successfully manufactured, marketed, and launched. In the following essay we will engage the issues that must be recognized during the development of the product. In identifying the following components of cost allocation and pricing, analysis can be conducted:

➢ Joint costs, Sunk costs, Opportunity costs

➢ Cost-plus pricing, Target costing, Activity-based pricing

Problem

The lack of research and development in understanding the nature of costs, industries, demographics, and competitiveness can result in low consumer reaction. The poor allocation of capital in regards to cost and pricing decisions in the corporation are a result of manufacturing products that will not make a profit or retain capital incurred during the process.

Solution

Once thoroughly understanding the subtopics discussed, the corporation has the ability to work with cost allocations and product pricing decisions. The inputs focus represents how the subtopics coexist and can be present during the decision making process. By having all information for analysis prepared the corporation can allocate capital with low risk.

Competitive Advantages

In today’s economy corporate decisions reflect on the ability to remain competitive in all aspects of the product life cycle. It remains evident that without the knowledge of local competition and the desired industry the corporation will not succeed. By understand the current environment the corporations upper management have the ability to make educated decisions when pertaining to costing and pricing decisions.

In the development of products and services the corporation must continuously conduct strategic analysis that will result in annual positive incomes. During these...